Gold is trading low from Wednesday after FOMC statement, and traders are awaiting the US Q4 advance GDP release for a fresh direction.

XAU/USD lost ground once again on Wednesday after the Fed left its key rates unchanged. Fed left their benchmark interest rate unchanged near zero as they flagged a moderating U.S. recovery and reiterated a pledge to use all available tools to support the economy during the coronavirus pandemic.

Powell said that the Fed would provide ample notice with concluding that it will slow its bond-buying program at the current pace of US$120 billion of purchases per month until “substantial further progress” toward its employment and inflation goals has been made. “We will communicate very clearly to the public,” he said, “and will do so, by the way, well in advance of active consideration of beginning a gradual taper of asset purchases.”

“The path of the economy will depend significantly on the course of the virus, including progress on vaccinations,” the statement said. “The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.”

“It’s very difficult to imagine out-of-control inflation,” Charles Evans, president of the Federal Reserve Bank of Chicago, said earlier this month. “I welcome above-2% inflation. Frankly, if we got 3% inflation, that would not be so bad.”

Elsewhere, USD is being supported by dovish commentary from ECB members and sources on Wednesday; ECB Governing Council Member Klaas Knot, who is typically one of the more hawkish members at the bank, made dovish remarks in which he said that the ECB has the necessary tools, including further rate cuts, to prevent any further strengthening of the EUR.

A latest news that ECB officials reportedly think that markets are underestimating the odds that the bank might cut interest rates and policymakers at the bank are said to agree that such stimulus remains a viable option. This latest news triggered a bout of weakness in EUR (and other G10 pairs) and strength in the US dollar, which has weighed on the precious metal.

XAU/USD 4 Hour Chart:

Support: 1831.2 (S1), 1820.4 (S2), 1809.5 (S3).

Resistance: 1853.0 (R1), 1863.9 (R2), 1874.7 (R3).

Amidst all the catalysts creating pressure on the yellow metal, we expect a bearish trend for XAU/USD.